Thursday, September 6, 2012

Smith & Wesson (SWHC) Shoot Up on Record Earnings

Shares of Smith & Wesson Holding Corp. (NASDAQ: SWHC) soared after reporting record earnings for the quarter, with the next quarter also expected to be robust as well.

In its fiscal quarter ending July 31, net income climbed to $18.9 million, or 28 cents a share, on sales of $136 million. That was a huge increase over the $2.3 million, or 4 cents a share recorded last year for the same quarter.

This was far beyond analysts' expectations, which was 18 cents a share on sales of $128.7 million.

For the next quarter, which is usually seasonally slow, Smith & Wesson is looking for sales in a range of $130 million to $135 million, and earnings of 19 to 21 cents a share. Analysts are estimating sales of $119 million and earnings of 13 cents a share for the fiscal second quarter.

For the the fiscal year ending in April, 2013, the company projects earnings from 85 to 90 cents a share on revenue of $530 million to $540 million. That would be a gain of almost 33 percent over 2011.

That would also explode past analysts' estimates of 57 a share for the year, which would include special items. Sales are expected to come in at $498.2 million for the year.

According to Smith & Wesson, the reason for the jump in sales was the introduction of the Shield, which is marketed as "slim, concealable power." It is offered in 9mm & .40-caliber versions

While that may be true in general, specifically the reason is because of the corrupt Obama administration, which has flamed the fire of racism where it doesn't exist, causing many people to stock up on firearms in preparation for possible further unrest and danger.

If Obama were to surprisingly win reelection, gun sales would soar, while if Romney wins, you may see a reduction in sales in response to a safer, more competent and honest administration.

As it is, the gun manufacturer has a backlog of just under $400 million, a 164 percent rise over last year in the same period.

Smith & Wesson Holding Corp. closed the session Thursday at $9.00, gaining $0.28, or 3.21 percent. In after hours trading, the shares of the company skyrocketed to $10.72, jumping $1.72. or 19.11 percent.